Korea, Japan, and Taiwan compared

Seoul
:
KDI School of Public Policy and Management

Japan(Asia and Pacific)South Korea(Asia and Pacific)Taiwan(Asia and Pacific)

Language

English

File Type

Documents

Original Format

pdf

Subject

Economy < Financial PolicyIndustry and Technology < General

Holding

KDI School of Public Policy and Management

License

Abstract

This paper investigates the political origins of striking variations in financial policy toward small business in Korea,Japan, and Taiwan. All three had credit-based and priceadministeredfinancial systems; yet these similarly structured systems were wielded differently to produce widely divergentindustrial structures. The paper argues that economic policy inEast Asia is best explained not by the technocratic preferencesof an elite bureaucracy or by the bottom-up pressures of organizedinterests, but by political exigencies and choices of the ruling coalition, as defined both by the competition for state poweramong various elite policy factions and by the winning political coalition's consequent task in building paternalistic authorityin the eyes of the society. Thus main policy changes occurredabruptly, within the same continuing governing party or elitegroup, and as a strategic decision. Understanding such dirigiste pattern of policymaking is important because the stickiness ofstatist institutions and policy legacies constrains and molds,for better or worse, how the dynamics of coalition politics shape modernization in these nations, no matter how strong the homogenizing globalization forces may be.